April Data Shows Slight Drop in Home Values

Posted on May 2nd, 2013 · Posted in News

In line with Reserve Bank comments last week that there’ll be occasions when property prices drop slightly despite the general upward trend of the market, an analyst on Wednesday released figures showing exactly that.

The RP Data-Rismark April Hedonic Home Value Index said that dwelling (houses and apartments combined) values dropped 0.4% in Sydney; 0.5% in Melbourne and 0.7 % in Brisbane. The fall across the eight capital cities combined over the month was 0.5%.

RP Data’s director of research, Tim Lawless, described the April results as a mere “stumble” on the road to recovery rather than any trend of values dropping.  “When viewed in line with other metrics such as auction clearance rates, private treaty indicators and some improvement in housing finance demand, it is likely that the negative April result will be a blip along the path to recovery.

“We weren’t expecting that the high rate of growth evidenced over the first three months of the year would be sustained into April. A more measured pace of growth is a much more realistic outcome for the Australian housing market, especially considering that the first quarter is typically the strongest for value growth.”

The report said for the three months to April, dwelling values had increased 1.1% in Sydney; 1.8% in Melbourne and dropped 0.9% in Brisbane.  The head of the Reserve Bank’s financial stability department, Luci Ellis, told the Citibank Property Conference last Wednesday that house price growth would be “slower in future than in the previous 30 years” and suggested there could be occasions when prices drop slightly.  “If housing price growth is now cycling around a lower average, there will be more periods when prices are falling [a little] in absolute terms,” Dr Ellis had said.

The RP Data figures showed that the best performing capital city for the three months to the end of April was Darwin with 5% growth and Hobart was the worst performer with a drop of 1.6%.  Darwin houses also had the highest gross rental yields with 6% for houses and 6.1% for units.  The lowest rental yields were in Melbourne, with houses 3.6% and units 4.4%.

RP Data confirms Sydney as the most expensive city for property with a median dwelling price of $565,000.  Most affordable is Hobart with a median dwelling price of $311,500.

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